There is often confusion around the different terms which are used in relation to deceased estates. Below is a brief explanation of these terms and how they apply.
What is estate planning?
Estate planning involves developing a strategy for dealing with your assets, both in the event that you lose capacity while you are alive and in the event of your death.
A suite of legal documents can be prepared to cover these situations, to ensure that your assets and affairs are handled in accordance with your wishes. These documents include:-
- an enduring power of attorney – to enable someone to deal with your financial affairs;
- an advance care directive – to enable someone to make medical decisions on your behalf; and
- a will – appointing an executor to administer your estate and nominating beneficiaries who you wish to benefit from your estate.
It is important to have a good estate plan in place and to seek expert legal advice regarding asset protection, tax advantages and avoiding potential estate disputes.
What is an estate dispute?
Estate disputes can occur when a person has died and there are family members who disagree as to the terms of the will or how the estate is to be distributed. If a child, spouse or financially dependent person has been left out of a will, they may make a claim against the estate within the specified time period.
There are many factors which are assessed when determining the outcome of a potential claim against an estate including:-
- the claimant’s relationship with the deceased and any monies they may have received during the deceased’s lifetime;
- the value of the estate;
- the current health and financial status of the claimant and of the beneficiaries who have been provided for in the will.
There is a very strict time period for making a claim against an estate, therefore expert legal advice sought be sought without delay.
What is estate administration?
Estate administration refers to the process of dealing with the assets and liabilities of a deceased estate. In order for an estate to be administered, a grant of Probate or grant of Letters of Administration will generally be required.
The grant will provide the executor or administrator with the authority to sell and transfer the deceased’s assets. The executor or administrator will then be required to pay all liabilities owed by the deceased and to then distribute the net proceeds of the estate.
If the person died with a Will, the executor will need to distribute the estate according to the terms of the Will. In the absence of a Will, the administrator will need to distribute the estate in accordance with the law.
The administration of an estate is often quite complex and should be done in conjunction with expert legal advice.
Please contact one of our experienced Wills and Estates Lawyers who can provide expert advice and assistance with all areas of estate law.
Disclaimer: This Article provides a summary of the subject matter only. The information contained within is not intended as advice, legal or otherwise, and should not be relied upon as such. Please contact us should you wish to discuss the subject matter of this article further or obtain professional advice on the same.